By Rodney Campbell –
DVI Equity Partners Invests in ED2 Corporation
In the race to grab a share of the 5G technology market, DVI Equity Partners found a ready-made partner. Tucson-based ED2 Corporation, which focuses on next-generation wireless products, fits the model of an organization that DVI supports.
The venture capital firm is part of Diamond Ventures, a dominant force in the Tucson real estate and investment fields since 1988. It’s a firm that knows Southern Arizona well, from established businesses to promising startups.
“DVI Equity Partners has an intentional focus on investing in Arizona- and Tucson-based companies and our expertise in commercial and industrial real estate reinforced the importance of 5G,” said DVIEP Principal Ngoc Can.
ED2, founded in 2007, spent its first decade focusing on marine radio wireless applications and research and development solutions. When current CEO Sergio Cardona bought the company in 2018, he shifted its focus to emerging technologies.
5G is short for fifth-generation cellular wireless. Compared to 4G, 5G offers greater speed, lower latency and the ability to connect many more devices at once. Wireless carriers are dipping their toes in the market as they battle to lead the technology. 5G is already being rolled out in some markets across the nation and the industry is expected to greatly expand starting in 2021.
“The speed, latency and bandwidth will allow people to better communicate,” Cardona said. “At ED2, we are focusing on transforming those benefits into innovative, new ways to communicate. 5G will make it easier for people to talk to others, to things, and to experience machine smartness.”
DVIEP started in spring 2018 with a mission to invest in early-stage, emerging technology companies specializing in disruptive technology. It emphasizes efforts with companies founded and led by women and minorities. The firm evaluates companies that create business-to-business value in national security, enterprise software, artificial intelligence, data storage and analysis and other areas.
DVIEP was drawn to ED2’s impressive portfolio, which includes:
• Low-cost, band-pass technology for 5G radio, radar, cellular, mobile, general wireless, lot and millimeter wave applications that filter out interfering frequencies and provide clean signals
• A first-of-a-kind universal 5G wireless software-defined repeater that can extend current 5G range by 10 times, providing greater penetration through glass and walls and around corners
• A 5G antenna—which is low cost and has low power consumption—that can moderate noise and expand the range and power of 5G, satellite and other communications applications
“The U.S. and U.S.-based telecom providers transitioning to 5G are faced with serious infrastructure challenges, including costs that impact their ability to become competitive and gain industry dominance,” Can said. “We believe ED2 is well positioned to help overcome many of the 5G challenges that carriers and suppliers are faced with in deploying this new technology. ED2’s leadership and capabilities are strong, and their novel and low-cost components are in great demand. We are pleased to support their success.”
ED2 VP Ernie Nedder introduced Cardona to DVIEP Managing Partner Bob Griffin to get the partnership started. Cardona and Griffin had a lot in common, most notably their success in startup ventures. They also saw huge growth potential in the 5G market.
“We started discussing the importance of 5G and ED2’s core competency,” Cardona said. “Bob and I had an immediate connection and the relationship naturally grew.”
As a result, DVIEP became the lead investor in a Series A funding for ED2, providing $2.6 million. It also will provide business and operational assistance to accelerate ED2’s growth in the global 5G market. Griffin joined ED2’s board of directors.
“We have been blessed from day one,” Cardona said. “We have an incredible team with noble values and ethical leadership. The culture or vibe of the company is apparent to any outsider.
“Additionally, we are blessed to have partnered with DVIEP. The DVIEP family is filled with caring visionaries and is very thorough. We enjoyed a smooth due-diligence process.”
The partnership has excellent potential for success and profit. The radio frequency front-end components market is estimated to rocket from $18.77 billion in 2019 to $39.71 billion by 2025, according to international market research company Yole Développement.
“Next-generation 5G wireless technology promises to be game-changing by offering speeds up to 100 times faster than today’s wireless LTE technology,” Can said. “ED2 is providing new, high-performance and low-cost components for 5G to assist the emerging ultra-fast mobile broadband standard achieve their promised high speed.”
Cardona is no stranger to startups and innovative programs like the Yuma Center of Excellence for Desert Agriculture. He left Raytheon in 2013 to start nMode Solutions, which provides high-frequency electronic component and system designs, and Triton Microelectronics. After a successful exit from both, he acquired ED2.
“Sergio is a repeat entrepreneur with prior successes in growing and exiting technology companies,” Can said.
Griffin and his team have a strong entrepreneurial track record. They started Knowledge Computing, a Tucson-based company that was eventually purchased by IBM. They are convinced this partnership will deliver similar success.
“We proved that a tech company can be created, grown and succeed from Tucson,” Can said. “We aim to replicate the success with ED2’s revolutionary technology and domain expertise.”